· US Group II base oils export prices weaken versus FOB Asia Group II prices in Q3 2025..· Prices weaken at time of year when FOB Asia Group II prices typically fall versus US prices..· Asia prices typically fall to help to avoid or to clear surplus volumes at time of year when regional demand faces seasonal slowdown.· Weaker US Group II export prices versus FOB Asia prices this year complicates any such moves to clear surplus volumes from Asia.· Weaker US Group II export prices vs FOB Asia prices by contrast facilitate moves to clear surplus volumes from US.· Dynamic suggests US market faces more pressure than Asia market to clear surplus volumes..· Any rise in US surplus supplies is relatively recent.· US base oils/lube stocks fall to forty-six-month low in May 2025, pointing to tighter-than-usual supply..· US base oils/lube exports then fall in June 2025 amid signs of weaker demand from term buyers in domestic and export markets..· Lower exports in June 2025 follow completion of most plant-maintenance in May 2025, raising prospect of rise in domestic output..· Lower exports, lower term demand and higher output coincide with rebound in base oils imports in June 2025..· Dynamic raises prospect of pick-up in US' surplus supply..· Like US, Asia’s net base oils supply also stays tighter than usual in first five months of 2025.· Asia’s tighter supply then extends into June 2025..· Dynamic raises prospect of blenders starting Q3 2025 with lower-than-usual stocks.· Firm demand in markets like India then extends through July 2025..· Dynamic raises prospect of blenders tapping already-low stocks, and of stronger pick-up in requirements for replenishment volumes later in Q3 2025.· Prices of imported base oils cargoes into markets like India and UAE maintain firm premium to FOB Asia prices during Q3 2025..· High price-premium points to firm buying interest, sustains incentive for Asia refiners to target those markets.· Firm supply-demand fundamentals leave Asia’s refiners facing fewer surplus volumes to clear.· Weaker supply-demand fundamentals in US leave that market facing more surplus volumes to clear.· Asia's Group II base oils price-strength relative to US prices so far in Q3 2025 reflects those dynamics..Global base oils margins outlook: Week of 18 August.Asia base oils demand outlook: Week of 18 August.Asia’s June lube demand recovers.US June base oils/lube exports fall
